Many businesses see potential new revenue as the main reason to go online. Transferring an organization’s brand to the web is not a guarantee to greater economic benefit. Web sites need to be well-managed and consumer-oriented.
Gaining success on the Internet is not only based on the strength of the online brand, the quality of the web site, and the size of its marketing budget; there are other factors all the top sites share. An analysis of 150 sites to identify common success factors indicated the following six trends appear time after time.
1. It’s about creating a business, not a web site.
An Internet strategy should be an integral part of a company’s strategic plan. Companies that create web sites without considering how the web fits with the rest of its marketing and sales mix are destined to fail.
Winning sites develop a strong business and marketing plan, and conduct market research and a competitive analysis before investing in Internet development. Before a site is launched, it is imperative that the company assembles a highly trained team with a clear leader and project owner. This ensures that the project leader closely monitors the developing web strategy. Management by committee does not work with the creation of an online brand.
Once a company decides to go online, it needs to dedicate financial and human resources to ensure the web site’s success. According to a survey by the Gartner Group, developing and launching an electronic commerce site costs an average of $1 million, and 79 percent of these costs are labor-related.
Gartner has identified three cost categories for e-commerce:
- Get on the map: For $300,000 to $1 million, a company can create a site that is adequate but functionally behind most industry participants.
- Run with the pack: For $1 million to $5 million, a company can create a site that is “functionally equivalent to most industry participants.”
- Market differentiator: For $5 million to $20 million, a company can create a site that “raises the industry competitive bar and changes the nature of online competition.”
2. Select a niche and focus.
The most successful sites on the Internet are those brands that choose to dominate a product category and as a consequence have become an expert in that market.
Amazon.com rolled out its product strategy in stages. After 2 = years of being the market leader in online book sales, Amazon.com added a music store to its site. It has only recently added classical music as it realized it wouldn’t have the depth of product its customers have come to expect.
A key element of becoming the leader within a particular market sector is the importance of creating trust with the consumer. By focusing on a specific market, an online brand is able to gain a level of expertise that ensures it continues to provide the level of product its customers require.
3. Define a clear market position.
The organization’s ability to communicate a simple statement to capture the consumer’s interest is an obvious advantage in gaining market share. This is particularly important for new online brands that are trying to establish a market presence using the Internet.
The top 10 most successful e-commerce sites are all characterized by having a clear market position statement. For example, look at Travelocity’s mission statement, “We have just as many destinations as airports,” and Tower Records‘ statement, “Always top 1000 on sale.” Both are concise, easy to remember, and creates a clear point of difference.
4. Product information creates consumer empowerment.
The brand owner can provide a better range of information about its products using the wide availability and convenience of the Internet. Using this information, consumers are in a better position to make an informed choice about their purchases. Comparison shopping is made easier with the Internet because the information is at the consumers’ fingertips.
The level of information that can be obtained from the Internet is much greater than is traditionally available from retail stores. For instance, www.valueamerica.com not only explains camera features, but also shows how the camera works under water, gives cleaning tips, estimates the camera’s value after three years, and compares it to competitors. There is no need to go to other sites to get more information.
5. Create an on-going relationship
The Internet provides the ideal medium for creating brand loyalty through the company’s ability to communicate directly with the end customer. Many companies have harnessed the dynamic nature of the Internet to create instant special offers for regular customers.
Some web sites send gift vouchers to regular shoppers to encourage future purchases or give discounts when customers purchase high volumes. Others, such as travel.com.au, send special offers by email to give its members priority access to discounts.
The future survivors on the Internet won’t be the sites with the most traffic. They will be the sites that have managed to gain the most data about their customers and have used this data to establish strong one-to-one relationships.
6. Give customers something they can’t get in the real world.
The smart Internet companies have seen the advantage of providing their customers with the tools to “build” a unique product based the customer’s specifications. The ability to customize products to better suit customer’s needs gives Internet traders an edge over their real world competitors.
For example, companies that normally sell through traditional retail channels are starting to specialize in products designed for the Internet. The site www.gift.com allows customers to design their own chocolate gift card to send to family and friends.
It is clear from these critical success factors that the winners have understood the need to invest in their web presence. Such an investment requires a commitment in time, money and people.
To be a true success, companies first need to decide if they want to be online or offline, and they have to have a clear sense of purpose if they are to create an online brand.